India seeks trade balance as ASEAN economic ministers conclude talks in Kuala Lumpur

THE final day of the 57th ASEAN Economic Ministers (AEM) Meeting and Related Meetings saw India press for a more balanced trading relationship with Southeast Asian nations, as consultations centred on a new goods package under the ASEAN-India Trade in Goods Agreement (AITIGA).

Chaired by Malaysia’s Minister of Investment, Trade and Industry, Tengku Zafrul Abdul Aziz, the AEM-India consultations sought to advance the review process of AITIGA, which has come under increasing scrutiny due to India’s growing trade deficit with ASEAN.

Bernama reported the newly proposed package is designed to correct long-standing trade imbalances while creating a “common landing zone” for future negotiations. Sectors such as electronics and pharmaceuticals are seen as potential growth areas.

“We are aiming for key decisions to ensure the review can be substantially concluded before the end of the year,” said MITI Deputy Secretary-General (Trade), Mastura Ahmad Mustafa.

India’s efforts were part of a packed final day agenda, which also included the fourth AEM Troika Open-Ended Dialogue with Switzerland, led by Swiss State Secretary Helene Budliger Artieda, and the 14th AEM-Canada Consultation. During the AEM’s networking lunch, the World Economic Forum (WEF) hosted a business dialogue on ASEAN’s digital economy goals for 2025.

A key development was the proposal by ASEAN and its partners to establish a dedicated RCEP Secretariat, aimed at strengthening the world's largest free trade agreement, the Regional Comprehensive Economic Partnership. The plan was endorsed by RCEP ministers during the fourth RCEP Ministerial Meeting, held alongside the AEM.

“This proposal is timely and important,” said Tengku Zafrul. “We are discussing a permanent RCEP Secretariat to focus solely on RCEP matters, so that the agreement can be further strengthened and adapted through formal reviews.”

The RCEP bloc, which includes ASEAN nations along with China, Japan, South Korea, Australia and New Zealand, also agreed to begin formal discussions on revising the agreement, particularly in light of global economic shifts and rising protectionist policies. Countries such as Hong Kong, Bangladesh, Sri Lanka and Chile have reportedly expressed interest in joining RCEP.

In a separate session, ASEAN ministers celebrated the recent entry into force of the upgraded ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), describing it as a “practical and forward-looking” response to global economic disruptions. Ministers urged remaining parties to ratify the agreement promptly to unlock its full benefits.

During the AEM–Closer Economic Relations (CER) meeting, which coincided with 51 years of ASEAN-Australia relations and 50 years with New Zealand, officials reaffirmed the strength of the partnership.

On the sidelines, United States Trade Representative Jamieson Greer warned that Washington could impose further tariffs on ASEAN members if trade negotiations prove unfavourable. “If we are unable to reach agreement, tariffs may remain an option,” he said, though he stressed that the current focus is on dialogue, not enforcement.

Meanwhile, the long-delayed Malaysia-European Union Free Trade Agreement (MEUFTA) is expected to be finalised by next year, according to EU Commissioner for Trade and Economic Security Maroš Šefčovič.

ASEAN’s partnership with the United Kingdom also advanced, with talks exploring bilateral digital trade agreements with Malaysia and Thailand. UK Parliamentary Under-Secretary Liz Lloyd highlighted Britain’s accession to the CPTPP in December 2024 as a key step in its Indo-Pacific engagement.

In energy cooperation, Malaysia highlighted the Laos-Thailand-Malaysia-Singapore (LTMS) Power Integration Project and proposed the Borneo Grid as a model for a wider ASEAN Power Grid. A new memorandum of understanding on regional energy trade is expected to be signed at the upcoming ASEAN Energy Ministers' Meeting in October.

In closing remarks, ASEAN Secretary-General Dr Kao Kim Hourn commended Malaysia’s chairmanship in a turbulent year and praised key deliverables, including the enhanced AITIGA and the upcoming adoption of the ASEAN Digital Economy Framework Agreement (DEFA), both slated for formal endorsement in October. - September 26, 2025